[XKxRome0ox]

Originally Posted by UncleWede

Dang, that's like 5.02% higher than the current 12-month I'm sitting on at the CU (which, incidentally, I don't think is FDIC insured)

Why don't you open something online? There are so many offering at least 4% out there
I just got a bunch of offers for 4.33% and above in the mail and email in the past week

[bagekko]

Yeah Ally has a great rate in low 4s, CO which is super easy to also open was high/mid 3s last month, most CUs have CD rates over 5.

Originally Posted by XKxRome0ox

Why don't you open something online? There are so many offering at least 4% out there
I just got a bunch of offers for 4.33% and above in the mail and email in the past week

[chassis]

Originally Posted by UncleWede

Dang, that's like 5.02% higher than the current 12-month I'm sitting on at the CU (which, incidentally, I don't think is FDIC insured)

It’s possible to have all cash, aka “checking account”, in a Fidelity cash management account earning mid-4% in a money market fund. A Fidelity cash management account functions almost identically as a traditional bank or credit union checking account. I am not aware of anything a Fidelity cash management account can’t do that a bank or CU account can do. So in practical terms they are functionally the same. The difference is the yield that can be earned in a 4+% MM fund vs a nearly zero % checking account.

I use Fidelity for everything, full stop.

I don’t work for Fidelity and have nothing to gain from sharing these thoughts. I have found it to be a far better way to manage day to day cash while earning some return on it.

[RickFLM4]

Originally Posted by chassis

It’s possible to have all cash, aka “checking account”, in a Fidelity cash management account earning mid-4% in a money market fund. A Fidelity cash management account functions almost identically as a traditional bank or credit union checking account. I am not aware of anything a Fidelity cash management account can’t do that a bank or CU account can do. So in practical terms they are functionally the same. The difference is the yield that can be earned in a 4+% MM fund vs a nearly zero % checking account.

I use Fidelity for everything, full stop.

I don’t work for Fidelity and have nothing to gain from sharing these thoughts. I have found it to be a far better way to manage day to day cash while earning some return on it.

I don’t know about the Fidelity product but money market funds (as opposed to money market accounts) are generally not FDIC insured.

[bagekko]

Fidelity has a BU that is a "bank", dk if its still called National Financial, would think those products would be technically in that BU and FDIC insured, but not positive.

Used to work for Fid, they are good, but a slow dying dinosaur, because they are so large, been around forever, and pretty safe is the reason they will not fall quickly. If AJ still runs the show for another 20yrs they will become irrelevant.

Originally Posted by chassis

It’s possible to have all cash, aka “checking account”, in a Fidelity cash management account earning mid-4% in a money market fund. A Fidelity cash management account functions almost identically as a traditional bank or credit union checking account. I am not aware of anything a Fidelity cash management account can’t do that a bank or CU account can do. So in practical terms they are functionally the same. The difference is the yield that can be earned in a 4+% MM fund vs a nearly zero % checking account.

I use Fidelity for everything, full stop.

I don’t work for Fidelity and have nothing to gain from sharing these thoughts. I have found it to be a far better way to manage day to day cash while earning some return on it.

Originally Posted by RickFLM4

I don’t know about the Fidelity product but money market funds (as opposed to money market accounts) are generally not FDIC insured.

[bagekko]

See the market for financial stocks seesawing rest of the week as suspected. DK how it is going to be stabilized in the next few weeks, more banks could fail. 10% chance of financial crisis and rising, really not ready for another 2008.

Oh lets distract everyone with Jet vs Drone LMAO, like the balloon nonsense was used to distract people from things.

[2008M36MT]

My CD was through Schwab at Discover Bank. Plenty of offerings at over 5%.

[XutvJet]

Originally Posted by bagekko

See the market for financial stocks seesawing rest of the week as suspected. DK how it is going to be stabilized in the next few weeks, more banks could fail. 10% chance of financial crisis and rising, really not ready for another 2008.

The market is quite pessimistic at the moment and most everyone has been calling for a recession for nearly the last 2 years. The market is latching on to this as the recession warning sign. I'm not sure I believe that a majority of banks are in a dire situation, but I'm sure some are now. This could likely spur a decent downturn in the near term, but I think the big downturn is still months out. I guess this could linger for a while, get a little better, and then bam, 15+% market downturn, lots of layoffs, housing turmoil, etc. Things are too expensive, wages and salaries too high, and money has been way too easy to make in market and for way too long. It's not sustainable and will correct. I feel really bad for those that are over-leveraged on their homes, cars, etc. and basically live paycheck to paycheck. Your toys that you really don't own may soon disappear because you can't afford them.

[bagekko]

I almost feel there's a chance if this mini crisis doesn't bring the big downturn this month then perhaps there's a chance the downturn won't be so bad. Yeah many people are in rough shape now and the govt doesn't solve problems, only make them worse. I think they should pause rate increases for at least the next 6 months. 15% is a conservative estimate, with the problems right now heck it's likely to be 25%+ if the big downturn happens, but hopefully it doesn't. But if it does then plenty of cash to make a killing like 2008.

Originally Posted by XutvJet

The market is quite pessimistic at the moment and most everyone has been calling for a recession for nearly the last 2 years. The market is latching on to this as the recession warning sign. I'm not sure I believe that a majority of banks are in a dire situation, but I'm sure some are now. This could likely spur a decent downturn in the near term, but I think the big downturn is still months out. I guess this could linger for a while, get a little better, and then bam, 15+% market downturn, lots of layoffs, housing turmoil, etc. Things are too expensive, wages and salaries too high, and money has been way too easy to make in market and for way too long. It's not sustainable and will correct. I feel really bad for those that are over-leveraged on their homes, cars, etc. and basically live paycheck to paycheck. Your toys that you really don't own may soon disappear because you can't afford them.

[chassis]

Originally Posted by RickFLM4

I don’t know about the Fidelity product but money market funds (as opposed to money market accounts) are generally not FDIC insured.

Right. They are SIPC insured.

[chassis]

What specifically is affecting "the banks"?

The consumer is in good shape, so that isn't the problem.

What is the problem?

[dradernh]

Originally Posted by UncleWede

Dang, that's like 5.02% higher than the current 12-month I'm sitting on at the CU (which, incidentally, I don't think is FDIC insured)

Check to see if your credit union is insured by the National Credit Union Administration (NCUA). Most credit unions are.

Originally Posted by chassis

What specifically is affecting "the banks"?

Panic, mostly, is my take: "Sell now; figure out later what happened."

[2000cs]

Originally Posted by chassis

What specifically is affecting "the banks"?

The consumer is in good shape, so that isn't the problem.

What is the problem?

With the FED’s encouragement over the past several years, banks have bought government securities with long maturities as investments. Some more than others, some also bought non-gov’t bonds. As the FED has raised interest rates, these securities market values have declined significantly. On the deposit site, the rate increases have caused depositors (individuals and institutions) to pull funds out of banks and put them into money market and other higher-yield accounts. Thus there is a squeeze on banks, which now are starting to pay higher interest to re-attract deposits.

The combination means banks will have to make loans but with capital requirements they will be credit-risk-averse. So it takes better qualification as a borrower to get a loan. The increase in deposit costs means those loans will carry higher costs - higher than just the increases driven directly by the FED. So if borrowing is harder to get and more costly, there will be a slowdown and this could be the last recession trigger.

The FED on Sunday put out its own statement (separate from the joint statement) saying they would make advances to banks, credit unions, etc taking government bonds as collateral at par. “At par” is the critical phrase, because that means maturity value and not market value. This is to help the banks get through the depressed bond prices on their books without having to sell them at a realized loss.

I think the banking sector contracting its lending practices will be sufficient to lead the FED to back off of rate increases and maybe even decrease. If they act this week, ahead of next week’s scheduled meeting, it could raise more concerns and set of additional panics, so they likely will not take public action until next week.

Bank stocks are being hurt by all of that plus the implied margin squeeze and lower lending volumes.

There is a lot more to this but that is the essence. I don’t expect further “runs” on the banks, but of course one or two more could bite the dust before this is all over.

[RickFLM4]

Originally Posted by chassis

Right. They are SIPC insured.

As I understand it, SIPC insures against the risk of a broker going under and not having access to your securities and cash. I don’t think SIPC insures against risk of loss of the investment, like a money market fund or other mutual fund. So while you are protected if the broker goes under and the risk of a money market fund holding short term investments is very low, there is still incremental risk vs. an FDIC insured deposit account, hence the higher return.

[antzcrashing]

I have moved to a more conservative 33% cash position in my portfolio.

I am just sitting waiting for SPY to go to 358, for my scoop move (SPY l, MSOFT, NVDIA)

What are other people doing/thinking?

[BMW F22]

Originally Posted by antzcrashing

I have moved to a more conservative 33% cash position in my portfolio.

I am just sitting waiting for SPY to go to 358, for my scoop move (SPY l, MSOFT, NVDIA)

What are other people doing/thinking?

I put some in Vanguard last year. I don’t know much about mutual funds/ETFs/indexes. Would like to invest more in those. Any recommendations or a relatively safe and profitable MF/ETF?

[antzcrashing]

Originally Posted by BMW F22

I put some in Vanguard last year. I don’t know much about mutual funds/ETFs/indexes. Would like to invest more in those. Any recommendations or a relatively safe and profitable MF/ETF?

I like sector ETFs, like SPY, DIA, or QQQ. Us stocks, similar to mutual funds but less fees. Give them a lookup. Many ETF options for sure, I have them in a small dose and hold individual company stocks for the remainder of my portfolio.

[NickyC]

Originally Posted by chassis

The consumer is in good shape, so that isn't the problem.

What?

https://www.cnbc.com/2023/02/03/us-c...-billion-.html

[2008M36MT]

Originally Posted by NickyC

What?

I’ll second that. What and how? The consumer is good at spending money they don’t have.

[bagekko]

We'll that article is misleading, CC balances rose but its mostly from increased rates on the balances not people necessarily spending more. CC variable rates we're prolly in the low teens a year ago and now 20%+. Some of the increase is from people using CC more because tough to afford everything but mostly it must be from compounding interest. Too many people overspending when credit is flowing and rates low, not paying off the balances, now CC rates are killing them. But yeah people also buy too much crap they can't afford.

Surely the balance transfer offers will be flowing to their mailbox daily.

Originally Posted by 2008M36MT

I’ll second that. What and how? The consumer is good at spending money they don’t have.

[NickyC]

Originally Posted by bagekko

Too many people overspending when credit is flowing and rates low, not paying off the balances, now CC rates are killing them. But yeah people also buy too much crap they can't afford.

Surely the balance transfer offers will be flowing to their mailbox daily.

If the rates are "killing" them, that is not the sign of a strong consumer.

If one needs a balance transfer in order to continue consuming, that is not a strong consumer either. That is someone delaying the inevitable and hoping for a miracle.

We haven't even hit the mass layoff period which is coming.

[dradernh]

Originally Posted by antzcrashing

What are other people doing/thinking?

1) Nothing (aka Sitting Tight).

2)